KARACHI
The rupee set another fresh low against the US dollar on Wednesday, closing in on the 178 mark.
According to the State Bank of Pakistan, the dollar opened at Rs177.88 in the interbank market and closed at Rs177.98, shedding 10 paisas (-o.06 percent). Within the open market, the rupee was traded at 180/181 per dollar.
This is the eighth all-time low of Pakistani rupee against the greenback during the current month. The dollar hit then highest ever levels of Rs177.89 on December 13, Rs177.71 on December 10, Rs177.61 on December 9, Rs177.43 on December 8, Rs176.79 on December 7, Rs176.77 on December 3 and Rs176.42 on December 02. The rupee’s depreciation during the ongoing fiscal year 2021-22 has been Rs20.56 and Rs17.83 in the current year 2021.
Soaring import bill and depleting forex reserves have been continuously building up the pressure on the rupee that also pushed inflation higher. In order to counter inflationary pressures and ensure sustainable growth, the State Bank of Pakistan (SBP) once again raised the policy rate by 100 basis points to 9.75 percent on Tuesday.
Official data revealed that Pakistan’s trade deficit ballooned by 112 percent to $20.59 billion during the first five months (July-October) of the current fiscal year 2021-22. The trade deficit was at $9.72 billion in the same months of the last fiscal year. The import bill surged by 69.17 percent to $32.934 billion during July–November 2021-22 as compared to $19.468 billion in the same period of the last fiscal year.
The experts said that the rupee is hovering around all-time lows as the currency is undergoing a fundamental realignment which left the market perplexed about the direction in many ways. They said that nothing is helping stop this free fall whether it is inflow of funds, higher remittances or high interest rate. They were of the view that the rupee’s depreciation is due to conditionalities of the International Monetary Fund (IMF).
They said that the government should clarify the situation and take market participants into confidence in order to end the prevailing uncertainty as the given situation is only benefiting the speculators. They said that amid the ongoing macroeconomic conditions, the rupee should not have crossed the 165 mark against the dollar.
